Kingfisher defaults on aircraft lease payment

New Delhi: The king of good times has flown into fresh turbulence. Liquor baron Vijay Mallya’s Kingfisher Airlines has defaulted on payment of le
ase rentals to GE Commercial Aviation Services (GECAS) for four A320s, according to a complaint filed by the US company with India’s aviation regulator.
Upset at the default, GECAS, one of the world’s top aircraft lessors, has asked the Directorate General for Civil Aviation (DGCA) for permission to repossess the aircraft and has demanded that the aircraft be de-registered from the airline.
However, Kingfisher, which is controlled by Mallya’s UB Group, denies any default and has obtained a stay order from the Karnataka HC to prevent the repossession.
“There is no default on part of Kingfisher Airlines. Had there been a default, the court would not have admitted our case. The fact that the court granted an immediate relief to us... demonstrates that the airline has an obvious and prima-facie case,” a Kingfisher Airlines official, who asked not to be named, told ET.
The official, however, admitted that Kingfisher had some disputes with GECAS on the terms of return of the aircraft and accused the US company of being “unreasonable.” Kingfisher Airlines declined to give details of the dispute on the ground that it was before the court. “GE treats its business and customer discussions with high confidentiality and is unable to disclose any details,” a GECAS spokesperson said.
05/11/08 Nirbhay Kumar/Economic Times

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Categories: Kingfisher Nov 2008